Just days before the Pre-Budget Report, PCG chairman Gareth Williams has written an open letter to Tony Blair slamming the ‘stealth tax‘.

‘A great deal of taxpayers money has already been spent defending IR35 from criticism made, not only by PCG but by the Confederation of British Industry; the Institute of Chartered Accountants in England and Wales and the Federation of Small Businesses,’ wrote Williams.

‘Much more will be spent if the Inland Revenue persists in defending legislation which penalises small Companies, particularly in the ‘knowledge economy’, the very sector on which your Government claims our country’s future depends.’

And he adds: ‘Surely the time has now come for the government to intervene and repeal this unwarranted legislation, which singularly fails to understand the way the knowledge based sector of the economy works, and to revisit the flawed assumptions upon which it is based.’

At the beginning of October, the PCG sought and won permission to have IR35 judicially reviewed as being contrary to European law. The Revenue opposed the PCG’s case and lost on all counts.